Odd Mail problem, possible dns issue

I have a strange problem with my setup. I have followed the perfect server cent os tutorial (http://www.howtoforge.com/perfect-server-centos-6.3-x86_64-apache2-courier-ispconfig-3-p5) and the server is running great. I have a domain who has an external microsoft exchange server dealing with their email Let's call them Client 1. Email is working great in all aspects except one. When a user from another domain (client 2) sends mail to the client that uses exchange(client 1) they recieve an error of .

Code:

This is the mail system at host web2.mydomain.com.
I'm sorry to have to inform you that your message could not
be delivered to one or more recipients. It's attached below.
For further assistance, please send mail to postmaster.
If you do so, please include this problem report. You can
delete your own text from the attached returned message.
The mail system
<user@client1'sdomain>: mail for "client1's domain" loops back to myself